Search Help

Enter one of more keywords to search. Use quotes for “exact phrase.” Note that '*' and '?' wildcards are supported.

When your search results appear, you can refine your search further: Sort for only results in which all search terms appear AND/OR sort by chronological order.

Article Date:
August 2012

Word Count:



How to Release Rental Property Tax Losses Trapped by the Passive-Loss Rules

In 1986, lawmakers drove a stake through the heart of your rental property tax deductions.


That stake, called the passive-loss rules, causes myriad complications that now, 26 years later, are still commonly misunderstood.


The Trap


In 1986, lawmakers made you shovel your taxable activities into three basic tax buckets. Looking at the buckets with business eyes, you find the following buckets:



Portfolio bucket for your stocks and bonds


Active business bucket for your material participation business activities


Passive-loss bucket for your rentals and other activities in which you do not materially participate


This article explains three escapes from the passive-loss trap so that you can realize the tax benefits from your rental losses.


Escape 1


Get out of jail free. Lawmakers allow taxpayers with modified adjusted ... Log in to view full article.

Already a subscriber?
Email Address

You’ll be able to read the full article and get instant access to the last few issues of the Tax Reduction Letter
Not yet a subscriber?
with a money-back guarantee

Powered by Cranium Softworks - CMS, Subscription Mgmt & Web Development